AGENDA
INTERCONNECTION (1):
•
Importance of Interconnection, Scope and Interconnection
issues
Interconnection Theories and Models
•
Why Access Regime?
•
Access Regime under Telecom Act 1950
•
Access Regime under CMA 1998
MOHAMED SHARIL TARMIZI
•
Elements of Access Regime
MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION
•
Commission Initiative on Access Regime
6 JULY 2003
•
Conclusion
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
The importance of Interconnection
Scope of Interconnection
• Communications
– Major consumer issue
• Competition
– Monopolies
• History of incumbent operator owning major
networks
– Interconnection is a key factor to
competition
• Different regimes have different definitions
– In Europe
“Interconnection means the physical and logical
linking of public eletronic communications
networks used by the same or a different
undertaking in order to allow the users of one
undertaking to communicate with the users of the
same or another undertaking, or to access
services provided by another undertaking.
Services may be provided by the parties involved
or other parties who have access to the network”
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
Scope of Interconnection (2)
Key interconnection issues (1)
• In addition, in Europe, they have another concept
called access.
“Access means the making available of facilities/and or
services, to another undertaking, under defined conditions,
on either an exclusive or non-exclusive basis, for the
purpose of providing electronic communications services. It
covers, inter alia;
Access to network elements and associated facilities and
services,
Access to physical infrastructure, software systems
Access to number translation systems,
Access to mobile networks, for roaming
Access to conditional access systems for digital television
services”
© 2003 Malaysian Communications and Multimedia Commission
Doc.31 - Interconnection 1: Theories
• Framework and procedural issues
–
–
–
–
–
Regulatory guidance
Interconnection with incumbents
Standard interconnection terms
Independent and timely dispute resolution
Non discriminatory access to interconnection
facilities and services
– Access to PSTN networks including planned
changes
– Treatment of Universal Service, Universal Access
or Access Deficit Charges
© 2003 Malaysian Communications and Multimedia Commission
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Key interconnection issues (2)
• Commercial issues
– Level and structure of interconnection charges;
basis for calculation (i.e. type of costs used to
calculate charges, revenue sharing, bill and keep
etc.)
– Unbundling of interconnection charges for
different network components and related services
– Resale of network facilities and services
– Payment for network modifications to facilitate
interconnection
– Confidential Treatment of competitive and
customer information
© 2003 Malaysian Communications and Multimedia Commission
Widely accepted Interconnection Principles (1)
• Terms of interconnection should not be
discriminatory
– Between dominant or non-dominant
• Interconnection should be permitted at any
technically feasible point
– If non standard, requesting operator should pay additional
costs
• Interconnection charges should generally be cost
based
• Cost inefficiencies of incumbent should not be passed
through
• Where reciprocal interconnection costs are balanced,
may consider bill and keep and not cost based
(simple)
© 2003 Malaysian Communications and Multimedia Commission
Key interconnection issues (3)
• Technical and Operational Issues
– Open network standards and technical compatibility
– Location of points of interconnection (PoI)
– Access to signalling systems, advanced digital features,
billing system, operations support systems (OSS), call
related databases
– Access to unbundled network components, including local
loops
– Equal ease of customer access to competitive networks
– Access to numbers and implementation of number portability
– Colocation and sharing of infrastructure (e.g. buildings,
poles, ducts etc)
– Quality of interconnection, including availability of sufficient
interconnection capacityto avoid congestion and to ensure
timely provisioning of interconnection services and facilities
© 2003 Malaysian Communications and Multimedia Commission
Widely accepted Interconnection Principles (2)
• Regulatory guidelines and procedures should be
prescribed in advanced to facilitate negotiations
• Standard terms and procedures should be published
for interconnection to dominant operators
• Interconnection procedures and arrangements should
be transparent
• Interconnection arrangements should encourage
sustainable competition
• Network elements should be unbundled and charged
separately
• Charges relating to universal service should be
identified separately and not bundled with
interconnection charges
• An independent regulator should resolve
interconnection disputes quickly and fairly
© 2003 Malaysian Communications and Multimedia Commission
WHY ACCESS REGIME?
Access is not an end in itself, but only an instrument to achieve
structural reform, which in itself is an instrument to promote
competition, productivity growth and consumer welfare
THE MALAYSIAN SCENARIO
To create a more competitive industry structure, there are two
options:
•
divestiture - i.e., forcing the vertically integrated operator
to divest itself of the monopoly business; or
•
setting up a Regulatory Regime (consisting of Access
Regime / Competition Regime) to regulate the monopoly
/ bottleneck business
US telecom industry took the divestiture route and forced AT&T to
sell off its local exchange carriers (creating the Baby Bells). But
most other countries have taken the Regulatory Regime route
© 2003 Malaysian Communications and Multimedia Commission
Doc.31 - Interconnection 1: Theories
© 2003 Malaysian Communications and Multimedia Commission
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WHY ACCESS REGIME? (cont)
Two main reasons for mandating Access –
•
to promote competition in a downstream market
(conversely, to control market power in the upstream
market); and
•
to promote any-to-any connectivity.
© 2003 Malaysian Communications and Multimedia Commission
ACCESS REGIME UNDER THE COMMUNICATIONS AND
MULTIMEDIA ACT 1998 (continued)
Principle behind Access Regime
•
Chapter 3 Part VI of the Act seeks to establish an Access
Regime to ensure that all network facilities providers (NFP),
network service providers (NSP) and applications service
providers (ASP) can gain access to the necessary facilities and
services on reasonable terms and conditions in order to
prevent the inhibition of the provision of downstream services
Explanatory Statement to the Act, para 82
© 2003 Malaysian Communications and Multimedia Commission
ACCESS REGIME UNDER THE COMMUNICATIONS AND
MULTIMEDIA ACT 1998
•
With the passing of the Communications and Multimedia Act
1998 (the Act), a new Access Regime was introduced
•
While it was noted that the Telecommunications Act 1950
(including the Licenses issued under it) was revoked, some of
the regulatory instruments under it have not been revoked
(although some / parts of them have since been repealed).
Similarly, the ICAs, which are effectively contractual
agreements, are still very much in operation
•
Efforts are ongoing to ensure that the intentions and
instruments of the (new) Act with respect to the Access
Regime are implemented
© 2003 Malaysian Communications and Multimedia Commission
ELEMENTS OF ACCESS REGIME
Definition of Access – section 6
§ “Access” means access to a network facility or network service
listed under Chapter 3 of Part VI.
Access List – sections 145, 146 and 147
§ Access List is a list of network facilities and network services in
respect of which Standard Access Obligations applies.
§ The Commission may determine an Access List on its own
accord or on the recommendation of an Access Forum.
Standard Access Obligations – section 149
§ SAO refers to the obligation of an “Access Provider” (NFP and
NSP) to provide access to the listed network facilities or
network services on reasonable terms and conditions to an
“Access Seeker” (NFP, NSP, ASP and CASP).
© 2003 Malaysian Communications and Multimedia Commission
ELEMENTS OF ACCESS REGIME (cont)
ELEMENTS OF ACCESS REGIME (cont)
Access Forum – sections 147, 152 and 153
§ Access Forum is a designated industry body with the
responsibility to recommend Access List and Access Code to
the Commission
§ The Commission may designate a single industry body to be
the Access Forum for that purpose
Access Undertaking – section 155 and 156
§ An Access Undertaking is an undertaking by a licensee to
provide Access to a particular network facility or network
service listed in the Access List and shall be registered with the
Commission
§ The undertaking may specify terms and conditions for Access
and shall be in accordance with section 110
Access Code – section 153 and 154
§ Access Code is a Voluntary Industry Code recommended by the
Access Forum and registered by the Commission
§ An Access Code shall provide model terms and conditions for
compliance with the Standard Access Obligation
§ The Commission may make a written request to the Access
Forum to prepare Access Code. On the other hand, the
Commission may determine Voluntary Industry Code or
Mandatory Standard, depending on the legislative criteria
© 2003 Malaysian Communications and Multimedia Commission
Doc.31 - Interconnection 1: Theories
Access Agreements – section 150
§ (Written) Access Agreement for the provision of listed network
facilities or network services shall be registered with the
Commission in accordance with section 91
© 2003 Malaysian Communications and Multimedia Commission
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ELEMENTS OF ACCESS REGIME (cont)
HOW IT ALL
PLAYS OUT IN
PRACTISE?
Access Dispute – section 151
§ A party to the dispute over the compliance with SAO may
notify the Commission of the dispute under Chapter 7 Part V of
the Act
License Condition
§ Insofar as Network Facilities Provider and Network Services
provider Individual Licensees are concerned, they are subject
to a License Condition which provides “The Licensee shall
permit interconnection with the Licensee’s network under
terms and conditions which may be determined and/or
approved by the Commission.”
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
COMMISSION INITIATIVE ON ACCESS REGIME
COMMISSION INITIATIVE ON ACCESS REGIME
Work on Access List
Work on Access Pricing
•
As mentioned above, Access List may be determined by the
Commission on its own accord or on the recommendation of
an Access Forum.
•
In line with the migration to the new licensing regime under
the Act, the Commission was of the view that the Access
Regime under the Act should be put in place as soon as
possible. With that view in mind, the Commission initiated
work on Access Regime by issuing the Commission
Determination on Access List* in March 2001.
§
Following the Commission Determination on Access List, the
Commission has also initiated work on Access Pricing, using a
cost-based LRIC model, to review the benchmark Access
Pricing determined in TRD 006/98
§
The study began in August 2001 and the Commission has
conducted a PI process in May 2002 to discuss the key findings
of the exercise
§
In July 2002, the Commission published the PI Report on
Access Pricing, recommending the new Access Pricing for
selective services on Access List
*Prior to that, in December 2000, the release of a Public Inquiry (PI) document on Access List
Determination and Access Pricing Principles, inviting submissions from the public, was the first
formal step taken by the Commission towards implementing Access Regime under the Act
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
COMMISSION INITIATIVE ON ACCESS REGIME
COMMISSION INITIATIVE ON ACCESS REGIME
Work on Access Pricing
Work on Access Pricing (continued)
•
The Minister of Energy, Communications and Multimedia issued
a Ministerial Direction on Mandatory Standard on Access
Pricing on 17 February 2003, directing the Commission to issue
a Commission Determination on Mandatory Standard on Access
Pricing, effective 1 July 2003
§
In the same PI process, the Commission also consulted the
public on whether the Local Access Funding (LAF) mechanism
(under TRD 006/98) should still be implemented given that
there has been a substantial change to the Universal Service
Provision (USP) system
•
The Commission will be issuing a new Commission
Determination on Mandatory Standard on Access Pricing before
1 July 2003
§
The Commission also consulted the public of whether an
Access Deficit mechanism should be put in place to replace the
LAF
§
In the PI Report, the Commission recommended the abolition
of LAF mechanism with a view to replace it with Access Deficit
mechanism, awaiting TMB’s evidence to support the proposal
© 2003 Malaysian Communications and Multimedia Commission
Doc.31 - Interconnection 1: Theories
© 2003 Malaysian Communications and Multimedia Commission
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COMMISSION INITIATIVE ON ACCESS REGIME
COMMISSION INITIATIVE ON ACCESS REGIME
Work on Mandatory Standard (MS) on Access
Work on Mandatory Standard (MS) on Access
•
•
The PI process was initiated on 30 April 2003
•
As part of the consultative process, a Public Hearing was
conducted on the matter on 6 June 2003 to discuss relating to
the draft Mandatory Standard on Access
•
The PI process was concluded on 30 June 2003 and a PI
Report will be issued on 30 July 2003
•
The Commission is also in the process of issuing a Commission
Determination on Mandatory Standard on Access, due date 14
August 2003
•
•
Similar to the situation with the Access List, a Code for Access
may be determined by the Commission on its own accord or
on the recommendation of an Access Forum
With that view in mind, the Commission has decided to initiate
another track of work with respect to the Access Regime i.e.
developing a Mandatory Standard on Access
The Minister of Energy, Communications and Multimedia
issued a Ministerial Direction on Mandatory Standard on
Access on 18 March 2003, directing the Commission to
conduct a Public Inquiry process before issuing a Commission
Determination on Mandatory Standard on Access
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
COMMISSION INITIATIVE ON ACCESS REGIME
CONCLUSION
Work on Guideline on Access Agreement
•
Given the importance of Access, the Commission has decided
to exercise its regulatory powers by developing initiatives to
establish a workable Access Regime
•
Notwithstanding the Commission’s initiative, industry self regulation for Access has always been given ample
opportunity and support to develop
•
The Commission’s initiatives have always involved industry’s
and public participation
•
In its efforts, the Commission has always built in flexibility in
that the industry self-regulation efforts will always takes
priority and precedence over the Commission’s own initiatives
•
In light of Access Agreements being lodged to the Commission
for registration, the Commission has also prepared a Guideline
to register Access Agreements for industry and the
Commission’s internal use
•
The work is slated to be completed in 3Q2003
© 2003 Malaysian Communications and Multimedia Commission
© 2003 Malaysian Communications and Multimedia Commission
THANK YOU
© 2003 Malaysian Communications and Multimedia Commission
Doc.31 - Interconnection 1: Theories
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